Swiss Re-scue

We're sorry Exxon, but your insurance doesn't cover that.

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March 14, 2006 5:12AM (UTC)

Two long plane flights this past weekend gave me the chance to read Eugene Linden's excellent "Winds of Change," a convincing (and depressing) investigation of how rapid climate change has played a significant role in the fall of several civilizations in human history.

By rapid, Linden means the dramatic raising or lowering of temperatures that occurs in the space of just a few years. The consensus view of climate scientists working today, based on voluminous research and data compiled and analyzed in the last decade, is that devastating climate change is not necessarily gradual, but can be "switched" on and off, given the right circumstances. By pumping the atmosphere full of unprecedented levels of carbon dioxide, humanity, argues Linden, is squeezing the trigger on a loaded gun.

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Linden covers a lot of ground, ranging from ancient history to state-of-the-art climate science to a sobering conclusion that we are not taking the measures necessary to ensure our future prosperity. I'd just like to call attention to two smallish points.

First, for anyone who may still be swayed by global warming skeptics, Linden directs us to the work of Naomi Oreskes, a professor of history at the University of California. Oreskes published a review of the scientific literature on climate change in Science magazine in December 2004. It demonstrates without a shadow of a doubt that the vast majority of climate scientists have concluded that humans are responsible for significant alterations of the earth's climate.

Perhaps you, like me, have already long been convinced of this fact. That means you may be as angry as I am at the mendacity and self-serving greed of a corporation like ExxonMobil, which has long financed the yammering of global warming skeptics. Is it an exaggeration to consider Exxon's record as evidence of crimes against humanity? I don't think so.

So I found some room for encouragement in Linden's discusion of the way that Swiss Re, the giant European insurance company, is approaching the problem. Swiss Re is a reinsurance company --- a large chunk of its businesses comes from selling insurance to other insurance companies to cover their potential losses. As one might guess, Swiss Re's business took a hit in 2005, as a result of the unprecedent hurricane damage that ravaged the United States. Swiss Re is alarmed at the rate at which the financial cost of natural disasters has been rising -- doubling every 10 years, and predicted to hit $150 billion a year within a decade.

Executives at Swiss Re are beginning to worry that the executives of corporations responsible for greenhouse gas emissions may ultimately be found legally liable for damage from natural disasters that result from climate change. Swiss Re has decided that it would rather not be on the hook for that kind of legal liability, especially for those corporate executives who are denying that there is any problem at all.

"Businesses open themselves to lawsuits when they take a position contrary to others in their industry, and in recent cases such as asbestos litigation, courts have assessed damages proportionate to a company's contribution on a problem," writes Linden. "Chris Walker of Swiss Re describes how this might come about with regard to climate change. He notes that energy giant Exxon Mobil accounts for roughly 1 percent of global emissions and has aggressively lobbied against any efforts to reduce greenhouse gases. 'So,' said Walker, 'we might go to them and say, "Since you don't think climate change is a problem, we're sure you won't mind if we exclude climate-related lawswuits and penalties from your [Directors & Officers] insurance."'"

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Are giant insurance companies humanity's last best hope for averting climate change catastrophe? Seems a little hard to believe. But there's no denying that, in the last analysis, the threat of financial pain is the best argument for forcing a corporation to do something it doesn't want to do. You go, Swiss Re.